Stakeholder Theory: Seeing the Field Through the Forest

Abstract

Does stakeholder theory constitute an established academic field? Our answer is both “yes” and “no.” In the more than quarter-century since Freeman’s seminal contribution in 1984, this domain has acquired some of the administrative, social, and disciplinary trappings of an established field. Stakeholder research has coalesced around a unique intellectual position: that corporations must be understood within the context of their stakeholder relationships and that this understanding must grow out of the interplay between normative and social scientific insights. Yet, much of this domain remains an unexplored territory. In this article, the authors assess the progress to date toward field status and outline future directions for stakeholder research.

Keywords

academic fields Freeman Social Issues in Management (SIM)stakeholder theory

Every academic wants to be in a field—and not just any field, a successful and prosperous one. If Hambrick and Chen (2008) are correct, though, this dream is out of reach for many, including those in the broad domain of Social Issues in Management (SIM). As an “admittance-seeking community,” they suggest, an emergent academic field only achieves success by differentiating, mobilizing, and building its legitimacy. Success requires fields to emulate the norms and styles of adjacent established fields and have a bounded set of shared interests. Lacking these conditions—if, indeed, they do lack them—SIMians are destined to miss out on the trappings of field status, which include prestigious publications, journals dedicated to shared interests, funded chairs, and tenure-track appointments. SIMians are pursuing a fruitless endeavor that may lead somewhere but not to the Elysian fields of academic success. This possibility should give us pause. It has rightly prompted self-examination, and this special forum is devoted to the question of whether the various research communities of SIM constitute legitimate academic fields. As one of the more established research communities in SIM, stakeholder theory merits attention in this task.

This article offers the authors’ reflections, as stakeholder researchers, on our domain’s potential as a field. Taking the question of “fieldness” as a starting point, we acknowledge the limits of our success to date. However, we suggest that this limited success is not really the most interesting question. Our contention is that, although our domain may not possess all the markings of a prosperous field, stakeholder researchers have wandered into important intellectual territory. We study the complex interactions between firms and their various stakeholders. The conceptual and empirical problems involved in this study are myriad, and although we have not progressed in the task so far as to level the tangled forest of issues and ideas into a proper field, we have made great progress in surveying its complexities. Moreover, the distinctive process of intellectual exploration that characterizes stakeholder research—a process we refer to as normative–social scientific interplay—is not only unique and valuable but also offers a template for how most, if not all, of SIM’s sub-domains, might demonstrate their intellectual distinctiveness and legitimacy.

Is Stakeholder Research a Field?

Hambrick and Chen (2008) and their intellectual forbears (Lodahl & Gordon, 1972; Pfeffer, 1993) suggest that it is not a difficult matter to discern whether a field has succeeded. Successful fields are, they suggest, those that have joined the established academic social order and have thereby attained resources, membership, and acceptance. Mitnick (2008) suggests that success is not nearly so simple or uni-dimensional; he offers a set of questions to guide a multidimensional assessment of field success and sets out four important criteria summarized in the Table 1. In this section, we address these queries and evaluate how well stakeholder research fits these criteria.

Table 1.

Mitnick’s Criteria for Assessing an Academic Field.

Levels of “fieldness”	Central questions
Community	Are there distinctive schools of thought?
	Does the area feature an active network of scholars that cross nominal formal boundaries?
Administrative	Is there a formal governance setting for the area?
Disciplinary	Are there groupings of sets of ideas into recognized and often formalized bodies of systematic study?
	Is there a label accepted and recognized externally?
Intellectual	Are the contents of the area distinctive in terms of content, methods, or logics?

Source. Mitnick (2008).

Community Level

Stakeholder research more than adequately constitutes a distinct community within the broader area of business and society studies. There is an active network of scholars which meets twice yearly, at the Academy of Management meeting (mainly under the aegis of SIM) and at the International Association of Business and Society (IABS) conference. The Strategic Management Society (SMS) started a Stakeholder Strategy Interest Group, which held its first conference in Barcelona, Spain, in the summer of 2011. Within this community, collaboration across institutional boundaries is common and takes the form of joint publications, research workshops, mini-conferences, and participation on stakeholder-related dissertation committees. A series of biennial mini-conferences, focused exclusively on stakeholder research, held its fourth meeting in 2012 at the University of Virginia, with previous conferences held at the University of Washington, the University of Richmond, and Brigham Young University.

Another interesting aspect of the stakeholder community is that the work done by these scholars crosses not just institutional boundaries but also disciplinary boundaries in collaborative work. Examples of this collaboration abound in stakeholder work, including Donna Wood, a sociologist, working with Ron Mitchell, an accountant; Thomas Jones, a social scientist, working with Andrew Wicks, a religious studies scholar; and Sandra Waddock, a business school–trained macro-systems theorist working with Kirk Hanson, an ethicist. Work in stakeholder theory is especially a fertile ground for inter-disciplinary collaborations. As we will argue later, the cross-pollination of ideas that comes from these collaborations is a key area of distinction for this nascent field.

Several senior scholars within the community hold chairs based on their work in this domain and are able to write tenure evaluation letters. Community members have been granted tenure based largely on stakeholder work. At its core, this community exists and coheres based on its interest in similar questions, its reliance on a common body of foundational literatures, and a set of shared assumptions. The strength and vibrancy of this community is one of the key aspects of whatever success the stakeholder idea has had within larger academic circles (see Table 2).

Table 2.

A Partial List of Scholars Within the Stakeholder Community.

Bradley Agle	Samantha Miles
Shawn Berman	Ron Mitchell
Douglas Bosse	Bobby Parmar
Thomas Donaldson	Robert Phillips
Heather Elms	Jim Post
R. Edward Freeman	Tara Radin
Jeff Frooman	Tim Rowley
Jennifer Griffin	Sybille Sachs
Jeffrey Harrison	Harry Van Buren III
Michael Johnson-Cramer	Sandra Waddock
Simone DeColle	Andrew Wicks
Thomas Jones	Donna Wood
Joseph Mahoney	Maurizio Zollo

Administrative Level

Although a community of stakeholder scholars does exist, its administrative complexity does not rise to the level typical of an established academic field. There is no organization devoted solely to stakeholder research, although, as mentioned above, the SMS has developed a Stakeholder Strategy Interest Group. In addition, although universities exist without departments of stakeholder studies, there are centers at universities that have played a prominent role in the development of stakeholder theory. Specifically, the Clarkson Centre at the University of Toronto played a key role in the developmental stages of modern stakeholder theory, holding a series of conferences which yielded several books and articles (see Clarkson et al., 1994). Some of the articles which had their germination at these conferences are now foundational pieces for the field, including Donaldson and Preston (1995), Jones (1995a), and Mitchell, Agle, and Wood (1997). Also important has been the Olsson Center for Applied Ethics at the Darden School at the University of Virginia, under the direction of both R. Edward Freeman and Andrew Wicks.

However, there is not something like an explicit division devoted to stakeholder work in the Academy of Management. And, although journals are increasingly open to stakeholder-related research, some journals, such as Organization Science do not list “Stakeholder Theory” as a topic area for a paper submission. The small, relatively underdeveloped nature of stakeholder theory’s administrative apparatus is probably a function of both its size and its largely subsidiary administrative status within the SIM field. Conferences in SIM typically devote a track to stakeholder research, and every call for reviewers includes a checkbox for those competent to review stakeholder work. Committees which seek diverse representation from among research domains in SIM or IABS often include at least one stakeholder theorist. The low level of administrative complexity, at this stage of the field’s intellectual development, seems both proportionate to its size (the number of people available to carry out administrative tasks like organizing conferences and staffing committees) and the necessary priorities for further growth. An emphasis on intellectual rather than administrative development seems to bode well for the field’s substantive development.

Disciplinary Level

A discipline possesses a recognized label and set of organized knowledge structures. As such, the disciplinary nature of stakeholder research is not easy to assess. After all, recognition is not, in itself, a dichotomous variable. Clearly, stakeholder research is not as universally understood as, for example, institutional theory is as a recognizable school of organization theory. Jones (1995b) has argued (see also Jones, 1983, for arguments about the need for an overarching paradigm in business and society research) for the paradigmatic nature of stakeholder theory as an organizing principle for business and society studies. For those who are not paying attention to developments in this domain, the insight may not be widely recognized. Of course, disciplinary developments are rarely obvious to external scholars who are not paying attention.

Increasingly, though, external scholars in fields near and far, from finance to political science, and from education to engineering, have adopted the term stakeholder to describe constituencies to which organizations and even societies must be accountable. When these scholars read the stakeholder literature, they discover widely shared groupings and approaches, such as Donaldson and Preston’s (1995) distinction between normative, descriptive, and instrumental stakeholder research. Indeed, four seminal works, which outline the basic modes of thinking and theorizing about stakeholders, accounted for some 41,650 Google Scholar citations as of May 25, 2016 (Donaldson & Preston, 1995; Freeman, 1984; Jones, 1995a; Mitchell et al., 1997). Other widely cited articles hint at specific approaches to analyzing stakeholder groups (Rowley, 1997—2,070 cites; Rowley & Moldoveanu, 2003—515 cites), their strategies (Frooman, 1999—2,231 cites), their legitimacy (Phillips, 2003—741 cites), and the life cycle of firm–stakeholder relations (Jawahar & McLaughlin, 2001—963 cites). Whenever scholars properly use and adopt these approaches, they give credence to the disciplinary nature of our field. Strategic management scholars, for example, such as Coff (1999) and Mahoney (cf. Asher, Mahoney, & Mahoney, 2005) have adopted the term stakeholder and now use it to direct attention to stakeholder relationships as the site of rent-generation for the firm. They cite a common body of seminal work, and in so doing, they suggest that, for those who are paying attention, stakeholder research has begun to develop the more formalized knowledge structures characteristic of a discipline.

To this point, we have suggested that the evidence concerning whether stakeholder research constitutes a field is mixed. However, the extent to which the answer to any of the first three questions is yes (or no) depends, in no small part, on the answer to the question of the field’s coherence at the intellectual level.

Intellectual Level

Assessing stakeholder theory’s success at the intellectual level raises the most profound questions about this business of assessing whether fields exist. A well-defined field certainly must have content, methods, or logics that are distinctive from other fields. Yet, how is one to evaluate distinctiveness? The common definition is merely that the content lends itself to the mass cultivation of research that no one outside of the field is willing or able to undertake. Nascent fields begin, of necessity, with a tangle of concepts, rooted in the fertile soil of an interesting intellectual premise. They confront a mass of conceptual and empirical problems that give rise to inquiry and that demand adequate theories capable of solving these problems (Laudan, 1977). To reach the point of fieldness, however, in which scholars can and do systematically harvest research findings, much of the complexity that makes a field interesting must be cleared away through simplifying assumptions and paradigmatic development (Pfeffer, 1993).

If this simplification and paradigmatic development is the logical endpoint of intellectual development for a successful field, we must conclude that stakeholder theory has not yet reached this point. Stakeholder researchers continue to wrestle, for example, with basic definitional matters such as which groups actually count as stakeholders of a given firm (Mitchell et al., 1997; Phillips, 2003). Attempts to solve basic conceptual problems continue to take precedence over empirical research in the field, indicating the field’s relatively early stage of development (Laplume, Sonpar, & Litz, 2008; Laudan, 1977). And, in the midst of ongoing conceptual debates, stakeholder researchers have tended to declare victory merely based on the fact that others have adopted the term stakeholder (Agle et al., 2007), rather than because stakeholder theory has proven sufficiently robust or successful in solving intellectual problems. We suspect that this victory may be a hollow one. After all, if the term and its basic implications remain our only insight, then stakeholder research has achieved little more than those fields Freeman himself identifies as showing the organization as open systems that exist in a web of first order or “set” relationships (Freeman, 1984). Many critiques say just this point, that stakeholder research was derivative from the start and has little to distinguish it from other fields of organization theory (Gioia, 1999; Treviño & Weaver, 1999). Certainly, the field requires further progress toward a unique set of insights, methods, or logic, and toward a clearer sense of its intellectual uniqueness.

Many ask, “Is stakeholder theory really a theory?” Critics (Gioia, 1999; Treviño & Weaver, 1999) and advocates (Clarkson et al., 1994; Jones & Wicks, 1999; Phillips, Freeman, & Wicks, 2003) have explored this question from many angles. That it seems a meaningful question to ask, however, indicates the most profound issue with our notion of fields as solving problems and producing findings. The very evaluation criteria rest on the paradigmatic assumptions of the empiricist even as the field attempts to explore what we might learn at the intersection of empirical and normative thought. Is Phillips’s (1997) Rawlsian view of how firms should treat stakeholders a theory? It is just as surely ethical theory as it is surely not music theory or legal theory. It will produce no “findings.” Indeed, one may reasonably doubt whether persuasive ethical insights and coherent ways of living are “out there” to be found. Yet, it interacts in some way and feeds a discussion with Jones (1995a), which can offer and has offered the conceptual underpinnings of empirical findings (Berman, Wicks, Kotha, & Jones, 1999). The intellectual vitality of life at the interstices of modes of thinking cannot be denied, and the possibilities for progress in this other realm, in which the very yardstick of progress is a subject for discussion, remain a common pursuit. Indeed, one might well find that the central intellectual commonality among stakeholder theorists is that the question, “Is stakeholder theory a theory?” is not an interesting one. (As evidence, one might consider the paucity of published articles on the question.)

It is important neither to underestimate progress to date nor to overestimate the value of paradigmatic development as an endpoint. To date, the basic premise of stakeholder theory has become well-established and widely accepted, that all organizations—and especially corporations—exist in a web of relationships with stakeholders. These stakeholders, including but not limited to, employees, suppliers, stockholders, customers, and local communities, affect and are affected by the achievement of organizational goals (Freeman, 1984). Because this premise is true, management is fundamentally a task of reconciling stakeholder demands (when they compete) and, in a larger sense, coordinating stakeholder contributions for the creation of value (Freeman, Harrison, & Wicks, 2007). Understanding this fundamental organizational task has become a fertile ground for inquiry. And this inquiry, as conducted by SIM scholars, is distinct, even from research conducted by strategic management scholars and organization theorists who use the term stakeholder but do not participate in the community identified above. Stakeholder researchers seek to solve the empirical problem of describing how and why organizations act and perform as they do while addressing the conceptual problem of what moral principles should guide these actions. Put simply, the distinctive value of stakeholder theory rests in the degree to which it performs as a theory of corporate behavior while remaining “explicitly and unabashedly normative” (Jones & Wicks, 1999, p. 206).

If stakeholder theorizing is distinguished by its roots in the rich and vital interplay between ethics-based and social science–based theory, its success comes not merely in the simplification so evident in “successful” fields like strategic management (cf. Hambrick & Chen, 2008). Rather, it succeeds as each successive contribution sparks new questions and insights from the other school of thought, whether it is the normative work of philosophers or the empirical work of social scientists. This interplay is deeply desired on both sides. An ethicist William C. Frederick (1998) wrote, “Business ethics theory is hobbled by a failure to acknowledge and integrate contemporary social science and natural science perspectives into the analysis of business operations” (p. 44). And an economist—none other than Michael Jensen (2008)—argued, in his introduction to the book Moral Markets, that social scientists need to be more concerned with the role of values in their work and that they have “far too long ignored the normative world” (p. ix). This dialogue between social scientists and ethicists, we would argue, happens within the domain of stakeholder research. And though the results are messy, by the standards of those from more developed fields, this messiness is greatly to be desired, if fruitful dialogue is as important a goal as paradigmatic clarity. To those concerned with academic success or paradigmatic development, a field may be what happens when a forest is leveled, but sometimes a forest is more desirable than a field.

In the examples that follow, we aim to show how this cross-pollination of ideas works in practice. We do not claim that each side is completely fluent in each other’s language. Nor do we argue that stakeholder theory has reached a level of theoretical reciprocity as elaborated by Weaver and Treviño (1994). But, we would argue the two are theoretically integrated. It is hard for scholars from either camp to advance stakeholder theory without being aware of and incorporating ideas from the other camp.

Exemplars of the Normative–Social Scientific Interplay

Social Science Informing Normative Arguments: Phillips (2003)

A first exemplar of the interplay between normative and social scientific work occurs as Phillips (2003) works to delimit who, exactly, qualifies as a stakeholder. In his book exploring the reciprocal nature of the obligations between firms and their stakeholders, he turns to the prior work of Mitchell et al. (1997) for insights. The outcome of Phillips’s work is explicitly normative in spirit. He aims to delineate how an organizational ethics differs from ethical obligations derived from political philosophy, and he specifically seeks to argue that fairness considerations ought to play a role in shaping managerial priorities. His starting point, however, is to take stock of how social scientists have begun to answer the empirical question: To whom do managers pay attention? While the answer to the question is separate from any questions about the groups managers should give attention, the answer to the first question helps to lay a groundwork for answering the second. Phillips, primarily concerned with building ethical arguments in the 2003 book, demonstrates remarkable facility in dealing with social scientific argument and for constructing philosophical arguments with an eye toward their empirical tractability. Recursively, Mitchell et al. (1997) were cognizant of the importance in normative claims in constructing hypotheses amenable to empirical testing.

Normative Arguments Influencing Social Scientific Work: Berman et al. (1999)

Another example of this interplay between the normative and the social scientific comes from the other direction (Berman et al., 1999). Where Phillips (2003) used social scientific conclusions regarding how firms do attend to stakeholders as a starting point for constructing normative arguments about how they ought to, Berman et al. (1999) use the normative arguments from stakeholder theory to construct empirical tests examining the decades old question of the link (if any) between corporate social performance (CSP) and corporate financial performance (CFP). In their study, they use two familiar normative arguments to construct two basic causal paths for this link. One, which they label an intrinsic model of stakeholder management, suggests that managers would account for stakeholder interests first in planning the business strategy which would lead to financial performance. In the other model, the instrumental model of stakeholder management, managers were presumed to attend to stakeholder needs only when they affect financial performance. This question of using stakeholders as means or ends has its roots in some of the earliest normative writing in stakeholder theory, which brought the lessons of Kantian ethics to bear on stakeholder theory (Evan & Freeman, 1988). But, for our purposes here, it is important that Berman et al. (1999) look first to normative theorists to guide them in developing their hypotheses. In addition to trying to account for differences in firm performance (an important empirical problem for management studies), they explicitly acknowledge that examining whether the moral tenor of firm behavior matters empirically, in itself, is an important intellectual problem.

Future Directions

This notion of interplay not only helps to make sense of the current state of development in stakeholder research but also suggests directions for future research. To the degree that future streams of stakeholder research advance this normative–social scientific interplay, they will not only increase our understanding of firm–stakeholder interactions but also contribute to the distinctiveness of the field. In this section, we examine three current directions in stakeholder theory which further highlight the importance of the normative–social scientific interplay.

The Nature of the Firm and Firm Value Creation

The first area is perhaps where we see stakeholder theory’s “theoriness” most distinctly. Not surprisingly, we also see this as one of the most promising areas of stakeholder theory. This research question concerns the measurement of firm value creation and the distribution of that value, to which we referred in the section on the field’s distinctiveness at the intellectual level. The basic change in conceptual schema needed to understand this question is how we might measure firm performance in a way that captures the value created for all its stakeholders, rather than focusing on the returns to its financiers, or its shareholders more specifically. At its heart, this concerns a cognitive switch in how we consider the nature and parameters of how a firm creates value with and for its stakeholders. To make this cognitive switch, we need to understand the corporation not as a vehicle for making money but, instead, as “just the vehicles by which stakeholders are in engaged in a joint and cooperative enterprise of creating value for each other” (Freeman et al., 2007, p. 6).

This theme of cooperation has been at the heart of stakeholder theory since its earliest days. From the beginning of modern stakeholder theory, Freeman (1984) emphasized the role of cooperation between firms and their stakeholders. Jones (1995a) focused on how trust and cooperation between the firm and its stakeholders could lead to competitive advantage. More recently, Bosse, Phillips, and Harrison (2009) have connected the importance of reciprocity to Coff’s (1999) notion of stakeholder rents, which begins to approximate something like a holistic view of value creation.

Normatively, this performance view raises a host of questions researchers must consider when thinking about value creation and its distribution among stakeholders. As Bosse et al. (2009) noted, we must ponder the procedural and distributive implications of a revised view of performance. Procedurally, to what degree should a stakeholder’s relative contribution to value creation determine how much input it gets into strategic decision making? Where shareholder activism and corporate governance are concerned, should the mere contribution of capital and taking on residual risk bearing entitle shareholders to greater voice than other key stakeholders? And, which questions should have input from which stakeholders? Perhaps even more vexing is the distributional question. Given that a firm captures the surplus value of the difference between the price of a good and the cost of the associated value creation activities, how is that surplus divided among the various stakeholders? As normative theorists focus more on the firm as an organizing device for groups of people to pursue shared projects (Freeman & Gilbert, 1988; Freeman et al., 2007) rather than as a collection of competing interests, how does that affect the principles by which value is distributed among these groups?

If we take this revised view of the nature of the firm seriously, it also has consequences for how we think about performance. Often, researchers associate performance measures with specific stakeholders: net profit and shareholders, product safety measures and consumers, chemical releases from manufacturing and the environment, and so on (Wood & Jones, 1995). The normative premises underlying the work of Freeman and Jones, however, point toward a more holistic notion of value creation and performance measurement. This notion of value creation has many implications for social scientists exploring firm–stakeholder relationships. How researchers address the problem of how to measure something like “aggregate stakeholder performance” is a question that has eluded researchers from the beginning of modern stakeholder theory. How one would commensurably measure the contribution of each stakeholder group to the total value creation process is a vexing question. At the same time that work proceeds to capture these holistic measures of value creation, social scientists need to continue to develop measures that help answer some of the distributional questions raised above. If value is distributed back to stakeholder groups as disparate as consumers and employees, how can measures be developed that allow us to compare these groups’ relative well-being? Clearly, there is much room for fruitful interplay between this evolving holistic view of value creation and the normative principles governing procedural and distributive questions in firm–stakeholder relations.

Examining the Role of Managerial Discretion in Stakeholder Theory

A second promising exchange between social science–based stakeholder researchers and ethicists concerns the role of managerial discretion in firm–stakeholder relationships. Hambrick and Finkelstein (1987) posited that firms and their managers vary in the discretion, or strategic latitude, afforded them by stakeholders in their environment. The implications of this argument for stakeholder theory remain underdeveloped, yet even this simple insight offers a starting point for normative theorists to begin to question how a firm’s obligations to its stakeholders might differ in the face of limited managerial discretion. Often, normative theorists seem to assume managers have unlimited latitude in dealing with stakeholders (Phillips, Berman, Elms, & Johnson-Cramer, 2010). However, if this assumption is not the case, do we have different expectations of managers’ treatment of stakeholders in the face or lesser or greater levels of discretion (Kacperczyk, 2009)? Or, are the normative expectations we have for managers inviolate regardless of their ability to control their own fates?

Another interesting step would be to explore the question of whether and how future levels of discretion are shaped by the moral quality of firm behavior toward its stakeholders: whether it fulfills obligations to stakeholders with clear moral standing (Evan & Freeman, 1988; Mitchell et al., 1997; Phillips, 2003). Normatively, this raises many interesting questions: Do stakeholders punish firms for moral lapses in their relationship by reducing the latitude that firms have in the future? What patterns of behavior develop over time between stakeholders and firms—trading latitude granted to the firm and consideration by firms toward stakeholders—across a series of shared interactions? How do members of a single stakeholder group respond to a firm’s treatment, or mistreatment, of other stakeholder groups? Relating to the last question, Bosse et al. (2009) have made a plausible case for spillover effects based on notions of reciprocity. This is an important first step toward understanding the complex interplay around discretion.

Empirically, these questions pose many challenges for social scientists. The question of whether and how firm action (or inaction) leads to changes in behavior on the part of stakeholders raises interesting measurement challenges. Moreover, social scientific work relating to managerial discretion and stakeholders can seemingly only move forward if the moral tenor of the firm’s relationships with its stakeholders is taken into account. Relating to the question of value creation and dispersion, does this interaction between managerial discretion and firm behavior affect a firm’s value creation capabilities in the long term? Work on both the normative and social scientific fronts relating to this question will be more useful to managers and other researchers if it remains keenly aware of the work done in both the philosophical and empirical realms.

Decentering the Firm in Firm–Stakeholder Analyses

The last area we highlight here is the work on reconceptualization of stakeholder sets as “decentered” networks in which the firm is not necessarily the central actor. Since Freeman’s (1984) book elaborated the need to move beyond a generic “hub-and-spoke” model of firm–stakeholder relations, there has been slow but steady progress toward understanding both the particularities and complexities of stakeholder sets. Rowley (1997), for example, examined the effect that these networks’ structural properties can have on firm behavior. Werhane (2011) has added to this argument by suggesting that the complex nature of the networks within which firms are now embedded necessitates a reconceptualization of the stakeholder model. These descriptive advances, already relatively well-developed, suggest the need for an exploration of the normative implications for actors in a decentralized stakeholder set. As Goodstein and Wicks (2007) argue, ethicists have devoted little attention to the principles governing stakeholder responsibility. These principles could not only include the obligations of stakeholders toward firms but also look at the relationships between and among stakeholders with little regard toward the explicit connection to the firm.

In this sense, normative theorists have an opportunity to examine the nature of the obligations network actors incur to each other when acting alone or in coalitions (cf. Rowley & Moldoveanu, 2003). Much more normative work needs to be done to uncover the obligations that stakeholders incur by voluntarily accepting benefits from the value created by the firm’s activities (Phillips, 2003). Indeed, as both normative theorists and social scientists do work pertaining to the positive effects of reciprocity and trust in business relationships (Barney & Hansen, 1994; Bosse et al., 2009; Fukuyama, 1995), we need to better understand the moral questions involved in firm–stakeholder relations from the stakeholders’ standpoint (Elms & Phillips, 2009).

For social scientists, this work also poses many empirical challenges. For example, can we demonstrate empirically that firms perform better in value creating activities when stakeholders fulfill their moral obligations toward the firm? Does reputation play the same role for stakeholders that it has been theorized to play for firms? And, does the importance of reputation differ depending on the role of the stakeholder? Is reputation more important for suppliers than employees, for instance? Answering such questions may also help us understand more fully the theoretical domain of stakeholder theory.

Conclusion

In this article, the authors have examined whether or not the work in stakeholder theory can rightly be considered a field. The evidence presented suggests that a fully formed field of study is not present but we might be hopeful about the prospects because stakeholder theory offers a key intellectual addition to the firmament of theories concerning organizations. That addition stems from the rich interplay between the normative and social scientific ideas within the theory. Because its normative prescriptions are explicit, social scientists offering tests of stakeholder theory cannot proceed in a moral vacuum. Similarly, the empirical offers reminders to normative theorists that the battle is not won because one can logically prove a prescribed action is “better.” Normative prescriptions need to be tempered with an eye toward reality in business practice if these prescriptions are to bring about the desired changes in managers’ behaviors.

However, although some might look forward expectantly to all the rewards that come with a forest being cleared for the cultivation of a field, we would not join those voices. Although we think stakeholder theory offers the intellectual promise to achieve the status of an academic field, there is still much interesting work to be done in some very foundational aspects of the theory. The messiness of the forest yields many unexplored areas that allow researchers to consider questions unencumbered by the canonical implements that one finds in a well-ordered intellectual field. At this point in the theory’s development, the cultivation of saplings seems as important as the cultivation of grain in a field. Most of all, we look forward to further developments in stakeholder theory guided by the interplay between these two streams within the literature, whether they produce mighty oaks, with branches of new questions, or help us produce tidy rows from the extant seeds of knowledge.

Footnotes

Acknowledgements

The authors thank Thomas Jones of the University of Washington for some very constructive comments on an early draft of this article as well as ideas related to the conceptualization of the project. They also thank Barry Mitnick for organizing the “State of the Fields” sessions at the Academy of Management and for constructive comments throughout the process of turning the presentation in a publishable article.

Authors’ Note

Some of this material was presented at the 2008 Academy of Management national conference in Anaheim, California.

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The authors received no financial support for the research, authorship, and/or publication of this article.

Author Biographies

Shawn L. Berman (PhD, University of Washington) is the associate dean and a professor of management at the University of New Mexico’s Anderson School of Management (ASM), where he holds the ASM Alumni Endowed Professorship. His main research interests are Stakeholder Theory generally, but particularly issues in employee–employer relations and measuring firm performance across all stakeholders. His work has appeared in Academy of Management Journal, Academy of Management Review, Business & Society, Business Ethics Quarterly, Strategic Organization, and other outlets. He currently serves on the editorial boards of Business Ethics Quarterly and Business & Society. He is a senior fellow at the Olsson Center for Applied Ethics at the Darden School (University of Virginia), as well as past program chair and division chair for the SIM Division of the Academy of Management.

Michael E. Johnson-Cramer (DBA, Boston University) is an associate professor of global strategy and ethics and interim dean of the School of Management at Bucknell University. His research emphasizes the sources of firm–stakeholder conflict, the nature of strategic decision making, and the concept of corporate grand strategy. His articles have appeared in such journals as California Management Review, Organization Studies, and Strategic Organization.

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